The rippling effect of mobile content

I had more than a few thoughts after reading an advance copy of the Pew Research Center report, "How mobile devices are changing community information environments" released today. 

First was affirmation for some of the things we're doing to serve our mobile market in Bakersfield. Our mobile site is our fastest-growing digital product ever. 

Second thing was we need to consider changes to better serve our mobile audience and to continue to think long and hard about blanket charges for digital content.

Third thing was I have even more questions -- and a big headache.

And that's the dilemma with mobile news and whether anyone will pay for digital content, both of which were key topics in the survey conducted in mid January on behalf of Pew Research Center's Project for Excellence in Journalism, Pew Internet & American Life Project and the Knight Foundation. 

That's no fault of this survey of 2,251 people, which offers fresh insight into a growing market segment for local media (including several interesting layers on community engagement I won't address here). The surveyors did a great job of including a large sample of cell-phone users, who represent a growing portion of our populace (particularly younger and more diverse segments) but whom traditional researcher companies have a hard time surveying. After diving deep into the methodology and the questions, I feel confident in the findings. 

Pew reports that 47% of American adults get some local news or information on their mobile device, be it a cellphone or tablet. That's encouraging, and that number will continue to grow. 

But to me, the definition of mobile "news" is murky. 

For example, the Pew study didn't ask people about whether they wanted classified ads on their mobile devices. If I didn't know better, I wouldn't have asked that question either. But in Bakersfield, on our 661411 mobile site, classifieds are a huge traffic driver, representing roughly one-third of the site's monthly traffic. Equally important, we charge advertisers an extra fee to place those classifieds on our mobile site, making 661411 a profitable product in a mobile environment where revenue models for traditional newspaper content remain mostly unproven. 

Taking it a step further, I don't think a traditional interpretation of news should drive what newspaper companies publish on their mobile platforms. And to a further degree, priority content on a cell phone might not be the same on a tablet.  Print, desktop, tablet and smartphone are different animals. 

But I'm getting off track. 

Back to the survey, when taking a more traditional interpretation of newspaper content, Pew doesn't see much optimism for getting mobile customers to pay for news content beyond the print subscription they may or may not be buying. 

Respondents were asked, "If your local newspaper no longer existed, would that have a major impact, minor impact, or no impact on your ability to keep up with information and news about their community?" The responses are scary: 28% said the loss of the newspaper would have a major impact, while 30% said the loss would be minor and 39% said the loss of the newspaper would have no impact. So 67% don't really care whether the newspaper disappears, regardless of whether they're paying for the content. That's a major image problem (I'll write more on that in the future).

Pew does say "those who currently pay for news would miss the paper more." But even within that group of paying customers, 21% say "losing their local newspaper would have no impact on their ability to keep up on local news and information." 

It's even worse among mobile users. "Fully 42% said losing their local paper would have no impact," Pew said. 

So newspapers clearly have a challenge on their hands. 

Boring deeper into the mobile users, "just 13% of all mobile device owners report having an app that helps them get local information or news, which represents 11% of the total American adult population," a Pew news release said. "Thus, while almost half of adults get local news on mobile devices, just 1 in 10 use apps to do so. Call it the 'app gap.' "

The release continues, "According to the survey, just 10% of adults who use mobile apps to connect to local news and information pay for those apps. This amounts to just 1% of adults."

In Bakersfield, we charge for our iPhone, Android and Blackberry apps. We have had about 1,200 downloads of those apps (for 99 cents to $1.99 depending upon the platform, with the large majority being iPhone users). Those app users consumed about 18% of total 661411 page views over the last month, with the other 82% coming via our free WAP version of 661411. You could call it our own app gap. 

Pew did find an opening, in that a small but sizable segment expressed a willingness "to pay for an online subscription to their local newspaper if the paper otherwise could not survive."  The survey did not define what that content might be, other than it could be accessed via a "computer, cell phone or other device."

The survey found 23% of respondents would be willing to pay $5 per month for "your local newspaper online"; 18% would be willing to pay $10 a month. 

That's encouraging right? Maybe, or not really, depending upon the starting point. 

Who pays for local news? Click for detailed imageIt's encouraging it you're satisfied serving a smaller, but paid, market share. That'd be a niche audience, but a loyal and more affluent one. And civic minded: Pew found people who pay for content are more likely to be engaged in their community. 

You could try to chase market share by winning over the 30% of respondents who told Pew the closure of the newspaper would have a minor impact on their ability to get local news. But winning over people on the fence is expensive; those customers would need a big lure to open their wallets for the long haul.  

Or you could continue to do what most newspaper companies are doing: supplementing their paid print product with free or "freemium" digital editions. If you're wondering why more newspapers don't charge people to read most content on their websites, it's because you'd need to sign up a scary number of people to pay $5 or $10 per month just to offset existing revenue from banner ads, online classifieds, directory listings and other advertising services. If you do charge for access, it's hard to sell advertisers on a smaller, albeit more affluent, audience. For those who don't know, most newspaper print subscriptions don't come close to covering operating costs; advertising is what generates the profits. So simply charging for digital access won't work unless you're tapping a small, exclusive audience who can afford an expensive subscription. 

So, the debate over paid vs. free vs. freemium continues. And will continue for some time, with yet another variable tossed into the equation.